New Data Suggests Market Slowdown May Be Ending
Nationally, pending home sales increased for the first time in six months, and new home sales and mortgage applications are rising.
New housing data offers hope that the market slowdown may be short lived. Nationally, pending home sales rose 2.5% in December, ending a six-month slide, the National Association of REALTORS® reported last week. New-home sales also rose 2.3% last month, according to the Commerce Department, and mortgage applications for home purchases are on the rise, coinciding with a continuing drop in mortgage rates. The 30-year fixed-rate mortgage fell to 6.13% last week – a third-straight weekly decline, Freddie Mac reports.
“The recent low point in home sales activity is likely over,” says NAR Chief Economist Lawrence Yun. “Mortgage rates are the dominant factor driving home sales, and recent declines in rates are clearly helping to stabilize the market.”
“The new normal for mortgage rates will likely be in the 5.5% to 6.5% range,” Yun says. “Job gains will steadily become important in driving local markets.”